Typically, to offer a new or revised insurance product, an insurance company faces an expensive, risky ordeal. The insurance company must attempt to obtain regulatory approval of the insurance product in each state and territory in which the insurance company wishes to offer the policy. Each state and territory independently reviews such new or revised products, resulting in some states approving one version of an insurance product, and other states approving a second version. In addition, in reviewing changes to old insurance products, states review policies in their entirety, not just the changes to the policy. Thus, it is often safer for an insurance company to create a new product than to revise an old product, and thereby risk the old product being rejected.
As a result, insurance companies typically end up offering a variety of insurance products, many of which provide similar coverages. However, an available coverage for a particular liability under one insurance product often differs from the coverage for the same liability provided by the same company under other insurance products. The variation of coverages results in increased costs of training employees to understand the subtle differences between the various similar coverages. The coverage variation also results in increased marketing costs.